EXHIBIT 10.4
REPUBLIC
BANCORP, INC
REPUBLIC
BANK & TRUST COMPANY
AMENDED AND RESTATED
OFFICER COMPENSATION
CONTINUATION
AGREEMENT
This is an Amended and
Restated Agreement originally dated as of the 15 th day
of June, 2001, made by and between Republic
Bancorp, Inc., a Kentucky corporation (the
“Company”), and Kevin Sipes (the
“Executive”), who is presently Chief Financial Officer
of Republic Bank & Trust Company (the “Bank”)
(the “Agreement”), in consideration of the mutual
covenants herein contained and in further consideration of services
performed and to be performed by the Executive for the Company
and/or its subsidiaries. As of the date of this Agreement,
Bank is a wholly-owned subsidiary of the Company. This
Agreement, as so amended and restated shall supersede the prior
agreements and all amendments thereto, effective as of the date of
its adoption. The Bank joins in this Agreement to further
accomplish the terms and objectives of this Agreement.
Recitals
A.
The Company considers the establishment and maintenance of sound
and vital management of the Company and its subsidiaries to be
essential to protecting and enhancing the best interests of the
Company and its shareholders.
B.
The Company recognizes that, while not anticipated, the possibility
of a change of control may exist. Such possibility, and the
uncertainty and questions which it may raise among management of
the Company and its subsidiaries may result in the departure or
distraction of key members of management to the detriment of the
Company’s shareholders.
C.
The Company’s Board of Directors has determined that
appropriate steps should be taken to encourage key members of
management of the Company and its subsidiaries, such as the
Executive, to remain in the employ of the Company and/or its
subsidiaries and perform their assigned duties without distraction
in the face of potentially disturbing circumstances arising from
the possibility of a change of control of the Company.
NOW, THEREFORE, in
consideration of the foregoing and of the covenants herein
contained, the parties hereto agree as follows:
Section 1 —
Definitions
For purposes of this
Agreement, the following words and terms shall have the following
meanings:
1.1
Termination by the Bank of the Executive’s employment for
“Cause” shall mean termination upon (A) the
willful and continued failure by the Executive substantially to
perform the Executive’s duties with the Bank (other than any
such failure resulting from Disability or temporary incapacity due
to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board
of Directors of the Bank (the “Bank Board”), which
demand specifically identifies the manner in which the Bank Board
believes that the Executive has not substantially performed his
duties; or (B) the willful engaging by the Executive in gross
misconduct materially and demonstrably injurious to the Bank or the
Company. For purposes of this definition, no act, or failure
to act, on the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interests of
the Bank or the Company.
1.2
A “Change in Control” of the Company shall mean
(i) an event or series of events which have the effect
of any “person” as such term is used in
Section 13(d) and 14(d) of the Exchange Act,
becoming the “beneficial owner” as defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of
securities of the Company or the Bank representing a greater
percentage of the combined voting power of the Company’s or
Bank’s then outstanding stock, than the Trager Family Members
as a group; (ii) an event or series of events which have the
effect of decreasing the Trager Family Members’ percentage
ownership of the combined voting power of the Company’s or
Bank’s then outstanding stock to less than 25%;
(iii) any person (including the Company or the Bank) publicly
announces an intention to take or to consider taking actions which
have consummated would constitute a Change in Control, or
(iv) the Company Board adopts a resolution to the effect that
a Potential Change in Control for purposes of this Plan has
occurred. For purposes of this paragraph, “Trager
Family Member” shall mean Bernard M. Trager, Jean S.
Trager and any of their lineal descendants, and any corporation,
partnership, limited liability company or trust the majority owners
or beneficiaries of which are directly or indirectly through
another entity Bernard M. Trager, Jean S. Trager, or one or
more of their lineal descendants.
1.3
“Compensation” shall mean the Executive’s
annual base salary at the greater of (A) the highest rate in
effect at any time during the twelve months immediately preceding
the applicable Date of Termination, or (B) the rate in effect
immediately prior to the applicable Change in Control.
1.4
“Contract Period” shall mean the period defined in
Section 2 hereof.
1.5
“Date of Termination” shall mean (A) if the
Executive’s employment is terminated for Good Reason, as
defined below, the date specified in the Notice of Termination, as
defined in this Section 1.8 below; and (B) if the
Executive’s employment is terminated for any other reason,
the date on which a Notice of Termination is given; provided
that , if within 30 days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the
parties, by a binding and final arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been
perfected).
1.6
“Disability” shall mean a physical or mental
incapacity of the Executive which entitles the Executive to
benefits under any long-term disability plan or wage continuation
plan applicable to him and maintained by the Company as in effect
immediately prior to the applicable Change in Control.
1.7
“Good Reason” shall mean:
(a)
Without the Executive’s express written consent, the
assignment to Executive of any duties inconsistent with, or the
reduction of powers or functions associated with, his positions,
duties, responsibilities and status with the Company immediately
prior to a Change in Control, or any removal of Executive from, or
any failure to reelect Executive to, any positions or offices
Executive held immediately prior to a Potential Change in Control,
except in connection with the termination of Executive’s
employment at death, for Cause or on account of Retirement or
Disability pursuant to the requirements of this
Agreement;
(b)
(i) the failure by
the Company to continue in effect any employee welfare or pension
benefit plans within the meaning of Sections 3(1) and
3(2) of the Employee Retirement Income Security Act of 1974
(the “Plans”), in which Executive was participating
immediately prior to a Potential Change in Control (or substitute
plans, programs or arrangements providing Executive with
substantially similar benefits),
(ii) the taking of
any action, or the failure to take any action, by the Company which
could (A) adversely affect Executive’s participation in,
or materially reduce Executive’s benefits under, any of the
Plans, (B) materially adversely affect the basis for computing
benefits under any of the Plans, or (C) deprive Executive of
any material fringe benefit enjoyed by Executive immediately prior
to a Potential Change in Control, or
(iii) the failure by
the Company to provide Executive with the number of paid vacation
days to which Executive was entitled immediately prior to a
Potential Change in Control in accordance with the Company’s
vacation policy applicable to Executive then in effect;
1
except, in each case, in
connection with the termination of Executive’s employment at
death, for Cause or on account of Retirement or Disability pursuant
to the requirements of this Agreement;
(c)
the failure by the Company to obtain an assumption of the
obligations of the Company under this Agreement by any successor to
the Company;
(d)
a reduction by the Bank in the Executive’s base salary as in
effect on the date hereof or as the same may be increased from time
to time, except as part of an across-the-board reduction of base
salaries applicable to all salaried employees of the Bank, provided
the reduction (or series of reductions) does not exceed 5% of the
Executive’s base salary prior to such change;
(e)
the relocation of the Bank’s principal executive offices to a
location outside the metropolitan Louisville area; or the
Company’s requiring the Executive to be based anywhere other
than in the metropolitan Louisville area, except for required
travel on the Bank’s business to an extent substantially
consistent with similarly situated executives’ business
travel obligations;
(f)
any purported termination of the Executive’s employment
during the contract period which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 3
below; and for purposes of this Agreement, no such purported
termination shall be effective.
1.8
A “Notice of Termination” shall mean a notice,
from the Bank or from the Executive, which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.
1.9
“ Plans ” shall have the meaning given in
Section 1.7(b).
1.10
Any reference to “Subsidiaries” of the Company
shall include those subsidiaries owned by the Company directly or
owned by the Company indirectly through another company which is
wholly-owned by the Company.
Section 2 —
Application of Agreement
This Agreement shall
apply only to termination of employment of the Executive during a
period (the “Contract Period”) commencing on the date
immediately preceding the date of a Change in Control and
terminating on the second anniversary of the date of that Change in
Control; provided, however, that each such Change in Control occurs
during the period commencing as of January 1, 1995 and
terminating at midnight on December 31, 1998 or as further
extended pursuant to the following sentence. At midnight on
December 31, 1998, and on each annual anniversary of that time
and date thereafter, such latter period shall be automatically
extended for two additional years, unless on or before such
anniversary the Company notifies the Executive in writing that it
elects not to extend such period. There is one Contract
Period for each Change in Control and there may be multiple
Change(s) in Control. With respect to a termination
pursuant to Section 3.2 only, the Contract Period shall also
include the period from and after a Potential Change in
Control. If a Potential Change in Control occurs but a Change
in Control does not follow within one year of the Potential Change
in Control, the Contract Period shall expire on the one year
anniversary of the Potential Change in Control.
Section 3 —
Termination
3.1
Procedure for Termination . Any termination by the Bank or
by the Executive, pursuant to this Agreement, shall be communicated
by Notice of Termination to the other parties hereto. The
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not
less than 51% of the entire membership of the Board of Directors of
the Company (the “Company Board”) at a meeting of the
Company Board called and held for that purpose (after reasonable
notice to the Execu
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